In the largest-ever forfeiture for a Nevada casino, Wynn Resorts Ltd., owner of Wynn Las Vegas, has agreed to pay the federal government $130 million to end a 10-year-old case revolving around Wynn’s use of illegal payment businesses to engage with high rollers.
In exchange, Wynn avoids prosecution.
The sum nearly triples the previous Nevada gaming company record for a penalty paid to settle an investigation with the US Department of Justice (DOJ).
In 2013, Las Vegas Sands Corp., which no longer has any casinos in Nevada, paid $47.4 million to settle a money laundering case.
Wynn Resorts assured its shareholders that the $130 million is not a fine and will be paid from funds directly involved with the transactions.
Key Highlights
- Previous record forfeiture by a Nevada gaming company was $47.4 million by Las Vegas Sands Corp.
- Third-party agents routed money from foreign gamblers through other companies.
- The money would eventually get to Wynn Las Vegas and skirt reporting laws.
- Wynn also settled a shareholder class-action suit over Steve Wynn’s alleged sexual harassment.
The Old End-Around
Third-party agents recruited overseas gamblers to Wynn and handled their monetary transactions.
Federal investigators began looking at Wynn’s dealings in 2014, finding that it used unlicensed money-transmitting businesses to handle foreign high rollers.
Doing so allowed Wynn and the gamblers to avoid customary financial processes and, in turn, dodge reporting and financial transfer regulations.
The third-party agents recruited overseas gamblers to Wynn and handled their monetary transactions.
Rather than wire money to Wynn Las Vegas ahead of time, the gamblers would pay the agent, who would then run that money through different bank accounts and companies before it eventually hit Wynn’s bank accounts.
From there, the money was sent to the Wynn cage, where it was available once the customer got to the casino.
Though certainly not aboveboard, the government did not classify the transactions as money laundering, even though they are under the umbrella of the Bank Secrecy Act, the same one that includes money laundering.
One Agent Handled $17.7 Million
Casinos, like all businesses, will be held to account when they allow customers to evade US laws for the sake of profit.
– US Attorney Tara McGrath
According to the Las Vegas Review-Journal, in one instance, Juan Carlos Palermo served as one of Wynn’s third-party agents.
Through “multiple” money-transmitting businesses that he operated, Palermo processed more than $17.7 million across over 200 transfers for more than 50 customers.
The money went through Palermo’s companies in both the US and other countries and he conducted transactions with Wynn or Wynn-associated bank accounts.
“Casinos, like all businesses, will be held to account when they allow customers to evade US laws for the sake of profit,” US Attorney Tara McGrath said.
“Federal oversight seeks to prevent illegal funds from tainting legitimate businesses, ensuring that casinos offer a clean, thriving and safe entertainment option.”
“The actions of these individuals, for which Wynn has accepted responsibility, date back many years and violated Wynn’s compliance policies and procedures,” the company said in a statement on Friday, September 6.
“We are pleased that [Wynn] has now resolved this long-standing legal matter.”
In an SEC filing, Wynn Resorts said that in determining the settlement, the DOJ took into account the company’s cooperation with the investigation.
Including the “extensive remedial measures” it has taken to make sure nothing like this happens again, and the fact that nobody involved in the payment transmission scheme has anything to do with Wynn anymore.
Shareholder Class-Action Lawsuit also Settled
In their lawsuit, shareholders claimed that Wynn’s stock price fell because of the allegations against Steve Wynn and that company executives did nothing about the allegations when they were made aware of them.
At the same time – and unrelated to the settlement with the DOJ – Wynn Resorts announced that back in August, it settled a class-action lawsuit brought by shareholders in February 2018.
No dollar amount was disclosed, though the company said that number will be made public in the coming weeks.
Steve Wynn, founder and former CEO of Wynn Resorts, resigned in 2018 over multiple allegations of sexual harassment by former Wynn employees.
In their lawsuit, shareholders claimed that Wynn’s stock price fell because of the allegations against Steve Wynn and that company executives did nothing about the allegations when they were made aware of them.
Steve Wynn sued The Associated Press in 2018 for defamation for a story it published about two women who had accused him of sexual assault.
On September 5, the Nevada Supreme Court upheld a ruling by a three-judge panel from earlier this year and rejected the case.
It cited Nevada’s anti-SLAPP laws, designed to prevent lawsuits, especially from deep-pocketed companies and individuals like Steve Wynn, that are filed to silence critics.
Sources
https://www.reviewjournal.com/business/casinos-gaming/wynn-resorts-to-forfeit-130m-in-deal-with-feds-over-illegal-transactions-3164522/
https://thenevadaindependent.com/article/wynn-forfeits-130-million-in-settlement-with-doj-over-foreign-customer-betting
https://wynnresortslimited.gcs-web.com/static-files/c71048b4-e1db-4f80-883f-fa1771e833a4
